CINGFOREIGNTRADE(跨国公司财务管理-Josep.ppt

Multinational Financial Management Alan Shapiro7th Edition J.Wiley Sons Power Points by Joseph F. Greco, Ph.D. California State University, Fullerton FINANCING FOREIGN TRADE CHAPTER OVERVIEW: I. PAYMENT TERMS II. DOCUMENTS III. FINANCING TECHNIQUES IV. GOVERNMENT SOURCES OF EXPORT FINANCING AND CREDIT INSURANCE V. COUNTERTRADE I. PAYMENT TERMS I. PAYMENT TERMS A. Five Principal Means: 1. Cash in advance 2. Letter of Credit 3. Drafts 4. Consignment 5. Open Account PAYMENT TERMS B. Cash in Advance 1. Minimal risk to exporter 2. Used where there is a. Political unrest b. Goods made to order c. New unfamiliar customer PAYMENT TERMS C. Letter of Credit (L/C) 1. A letter addressed to seller a. written and signed by buyer’s bank b. promising to honor seller’s drafts. c. Bank substitutes its own commitment d. Seller must conform to terms PAYMENT TERMS 2. Advantages of an L/C to Exporter a. eliminates credit risk b. reduces default risk c. payment certainty d. prepayment risk protection e. financing source PAYMENT TERMS 3. Advantages of L/C to Importer a. shipment assured b. documents inspected c. may allow better sales terms d. relatively low-cost financing e. easy cash recovery if discrepancies PAYMENT TERMS 4. Types of L/Cs a. documentary b. non-documentary c. revocable d. irrevocable e. confirmed f. transferable PAYMENT TERMS D. DRAFTS 1. Definition: - unconditional order in writing - exporter’s order for importer to pay - at once (sight draft) or - in future (time draft) PAYMENT TERMS 2. Three Functions of Drafts a. clear evidence of financial obliga- tion b. reduced financing costs c. provides negotiable and uncondi- tional financial instrument (ie. May be converted to a banker’s acceptance) PAYMENT TERMS 3. Types of Drafts a. sight b. time c. clean (no documents needed) d. documentary PAYMENT TERMS E